Fintech branding strategy – why benefits matter more than features

Software engineers are so obsessed with product or service features that they forget or ignore the importance of benefits.

I go to a lot of fintech events – these are dominated by developers and software engineers. Discussion revolves around the opportunity of PSD2, data, customer needs and product/service development. Marketing doesn’t get on the radar!

Features vs. Benefits

By focusing on features fintech start-ups fail to understand that people often make choices based on benefits rather than what a product can do. To give you an example: a person has the choice of either buying a Skoda Superb or a Jaguar XF. The Skoda has loads more features and is cheaper, but the person chooses the Jaguar. Why? Because it’s a Jag baby! The benefits are status driven; we often base our choice on emotion rather than logic. This is the power of branding, where successful companies create ‘living brands’ which have an emotional connection with their customers.

Challenger Mobile Banks

Mobile banking is targeted at millennials with mobile banks like Starling challenging the traditional banks. When you talk to fintech developers they concentrate on features like free banking, keeping track of spending and splitting restaurant bills with friends. The feature consumers always mention is the ability to travel abroad with no transaction charges added to the exchange rate. These are all great ideas, but as with all features, these can be easily copied by your competitors. Indeed, the traditional banks have responded with their own mobile apps. Branding helps you differentiate and create brand loyalty to defend against me-too products.

Monzo and Starling

The fintech space is becoming crowded with new start-ups but Starling, Revolut and Monzo are successful in cutting through the noise as they understand the importance of marketing strategy and branding.

They are a cool club that you invite your friends to – the benefit is status within your peer group. Monzo has been described as a ‘bank that’s so cool, it has become a chat-up line in London’s bars” (Mashable). Recently, as I queued up to pay at Brew Lab, the male millennial in front of me proudly held up his Monzo card to settle his bill. A bright coral pink bank card gets you noticed.

Monzo and Starling have strong brand identities tied to the colour of their cards. Starling has a calm teal blue card to reflect “the iridescent blue-green tones of the Starling bird’s plumage” – according to their website. The business card is a professional deep navy blue – both cards are sleek and sophisticated. Starling seeks to reassure us that it can be trusted with our money.

Monzo appears to be the brash, boy-racer of banks – but it has very strong brand values. Community, transparency, solving customer problems and fairness are all key messages which Monzo uses to differentiate itself from traditional banks. The perception is that Monzo cares about you, whilst the traditional banks are untrustworthy monoliths with their “hidden charges & selling you products you don’t need”. Monzo is successful as it appeals to the emotions – it is a ‘living brand’.

Summing up

The emphasis of fintech development has concentrated on satisfying practical needs, but what of emotional needs? Don’t underestimate how a product or service can make someone feel. Building an emotional bond with your customers will differentiate your offering and defend against the competition.

Update 10th September, 2018

Monzo is to switch off debit card top-ups for everyone on Monzo from 2nd October as it is costing the company money (£4m in fees last year). Twitter chatter involves talk about switching to rivals Starling etc. However, other customers feel such affinity with Monzo that they have already taken steps to avoid using the feature in order to save Monzo money in fees (and are advocating their friends change their behaviour as well). Evidence that a ‘living brand’ evokes loyalty.